The reef, the oil, and the politics - 07/19/17 12:14 PM
We saw a story in The Times of London from Thursday, July 13, 2017, which intrigued us. Premier Oil and its partners had told The Times of a “world class” discovery of up to two billion barrels of oil off the coast of Mexico. “The Zama well is the first to be drilled offshore by the private sector after Mexico ended eight decades of state control of the oil industry.”
The discovery is in water 546 feet deep 37 miles offshore in the Gulf of Mexico. The Zama well is north of the Villahermosa/Coatzacoalcos region which is considered a Mexican oil belt a few hundred miles directly east of Belize.
In 1978, this newspaper accompanied a Belize football selection which traveled to the said Villahermosa/Coatzacoalcos area and played five games there. (The Belize selection, led by Christobal Mayen, went undefeated.) The newspaper is, therefore, acquainted with this area, and the oil industry so dominates the landscape that there is no locally grown corn available to make tortillas in Coatzacoalcos: the people have to eat bread made of imported flour.
Oil has not been in Belize’s national discussion for some months, ever since an impassioned outcry by landowners and residents of San Pedro Ambergris Caye forced the end of unannounced, secretive seismic surveys near the Belize Barrier Reef which the Government of Belize tried to pass off as harmless. The incident was one more example of a disconnect which appears to exist between the Government of Belize and the people of Belize where the matter of offshore oil drilling is concerned.
The relevant subject of Belize Natural Energy (BNE) comes to mind. Owners of Belize’s first productive oil well, in the Cayo District, BNE was responsible for serious damage to the Hummingbird Highway, the modernization of which had been one of the few visible successes of the People’s United Party (PUP) “growth economics” years. BNE’s massive oil trucks began pounding the Hummingbird ten years ago as they transported crude from the Spanish Lookout area to the Big Creek port in South Stann Creek. BNE damaged the Hummingbird Highway to such an extent that the present United Democratic Party (UDP) government made a big deal out of repairing the Hummingbird a couple years ago. It was BNE which should have repaired the Hummingbird: it was BNE which damaged it.
In poor countries like Belize, however, the oil industry almost always has the ruling politicians eating out of the palms of its hands. And all the indications have been that the UDP Dean Barrow governments view the oil industry with great favor (“Drill, we will!”), even the dangerous offshore oil industry. It was in offshore oil that the disconnect between the ruling UDP politicians and the Belizean people was exposed most dramatically at the time of the Oceana referendum the week before the general election of March 2012.
The national Oceana poll went big time against offshore oil drilling, which had received the unconditional support of the UDP administration, and a week later the heavily favored UDP came within 70 votes of losing power to an Opposition PUP which had appeared weak and divided because of two national leadership changes just months before the general election.
It is not possible to blame the Oceana offshore oil poll for the near UDP defeat in 2012, because it was actually in the rural, interior constituencies that the PUP did best in 2012, as opposed to the coastal constituencies which would logically be more interested in the offshore oil issue. It should be noted nevertheless, that the PUP in 2012 did win all four Toledo and Stann Creek District seats, including the coastal towns of Punta Gorda (Toledo East) and Dangriga. ((The PUP had lost all four of these seats in the 2008 general election.)
The BNE oil well at Spanish Lookout began producing about ten years ago, and it may be considered, under Belize’s oil industry circumstances, as experimental. It is now time to examine all the evidence which the BNE experiment has provided. We think that the BNE experiment is one which essentially confirms what international experience indicates: oil is an industry which benefits ruling politicians inordinately, as compared to the broader society. BNE became productive in 2007, near the end of PUP rule. So that it is to the nine years of UDP administrations since 2008 that we must look for the pros and cons of Belize oil.
Oil has clearly been a curse for Nigeria. Oil is now proving to be a curse for Venezuela. And, the newspaper predicts, oil will be a curse for Guyana. Oil seriously increases political corruption in poor countries. In the case of Belize, the ruling politicians portray petroleum as a cure for all our socio-economic ills. We have, however, seen all the examples worldwide where the nation’s oil income ends up in the bank accounts of corrupt ruling classes. Baseline poverty increases in oil-rich poor countries, and so do crime and violence.
Oil is not a partisan political issue in Belize. As far as we know, both the major political parties have a similar pro-oil position. The opposition to oil, especially offshore oil, in Belize comes from the tourism industry, which has experienced explosive growth here in the last two decades, and from environmental groups, which are quite strong in Belize. (You can count this newspaper among the environmentalists.) In addition, the Indigenous Maya of the Toledo District have come into direct conflict with a large oil company whose interests are diametrically opposed to the interests of the traditionalist Maya, whose way of life is not consistent with the commercial production of fossil fuels.
So now we come to the issue of climate change, whose lobbyists argue that the approach to energy matters on the part of homo sapiens as a species has to change if planet earth is to survive as a home which is hospitable to human beings. The climate change subject is technical, perhaps even complex, but it is also awesomely relevant to us as Belizeans. What the newspaper is saying is that it is necessary that Belizeans be educated and that Belizeans engage in intelligent discussion where the issues of oil, offshore oil drilling, and climate change are concerned. Belizeans need to make intelligent choices. The good news is that we do have choices in Belize, because our country has been so blessed with natural resources. The bad news is that our data base is limited. As a people, we are not informed, and we can be led places history has already shown that it is unwise to go. (Exhibit A – casinos.)
In closing, we want to draw your attention to another, smaller article on the same page in the same Times issue to which we referred in the opening paragraph. Here are three noteworthy paragraphs in an article entitled FORGET THE ABERRATION OF $100 CRUDE, SAYS BP BOSS.
BP is planning its operations on the basis that oil prices will remain about $50 a barrel for the next five years, its chief executive has said.
Bob Dudley said that the years of $100-plus crude prices before 2014 would turn out to have been “an aberration” and prices, which have fluctuated at about $50 a barrel in recent months and yesterday rose 1 per cent to $47.99, were returning to a more normal range.
Addressing the World Petroleum Congress in Istanbul, Mr. Dudley said that abundant oil supplies were “a fact of life” thanks to the shale revolution and technological advances.